Report: Nigeria to Miss Additional 4.6 Bcf/d 2030 Gas Output Target by 70%

Says only $2.7bn of $30bn capex committed so far

1.3bcf/d of expected 4.6 Bcf/d new gas expected by 2030

LNG exports to take bulk of additional volumes

*NRGI cites weak infrastructure gaps, financing constraints *

Emmanuel Addeh in Abuja

Nigeria’s decade-long drive to transform its economy through natural gas is on course to deliver only about 30 per cent of the additional production originally targeted for 2030, according to a new assessment by the Natural Resource Governance Institute (NRGI).

The report, titled: “Nigeria’s Decade of Gas at Midpoint: Progress, Gaps and the Path Forward,” projected that Nigeria could add only about 1.3 billion cubic feet per day (bcf/d) of new gas production by 2030, compared with the 4.6bcf/d increase envisaged under the Decade of Gas initiative.

The initiative, launched in 2021, was designed to transform Nigeria into a gas-powered economy by 2030, with increased gas supply expected to support electricity generation, households, transportation, industry and exports.

But years into the programme, the report said production growth was falling significantly short of the original ambition, despite six upstream projects having started production since 2021 and three others reaching Final Investment Decision.

NRGI said its assessment, based on Rystad Energy’s UCube database and an analysis of Nigerian gas projects that have started production since 2021 or are expected to commence by 2030, showed that even under the most expansive scenario, additional production would reach only about 1.3bcf/d.

That, it said, represented just 30 per cent of the government’s target for additional gas production over 2020 levels.

“Our analysis shows that in 2030—which would mark 10 years since the launch of the initiative—new upstream gas production would not meet the targets set at the outset. We find that, even in the most expansive scenario, about 1.3 billion cubic feet per day (BCFD) of new gas production would come online by 2030, this is only about a third of the target of an additional 4.6 bcf/d,” the report stated.

More significantly, the report warned that most of the incremental volumes were likely to be channelled towards liquefied natural gas exports rather than domestic consumption, potentially limiting the contribution of the Decade of Gas to Nigeria’s energy access and industrialisation objectives.

“In addition, most of this new capacity is targeted towards exports rather than domestic usage that would support domestic development goals. We highlight structural limitations that challenge gas-sector development and the risks that come from an expansive gas-infrastructure build-out,” it stressed.

It estimated that only between 20 and 30 per cent of the new gas production was likely to be available for domestic use.

The report noted that the Decade of Gas had been built around the expectation that increased production would provide gas for power generation, clean cooking, transportation and industries, while simultaneously expanding LNG exports and foreign exchange earnings.

However, it argued that Nigeria’s long-standing inability to establish bankable domestic gas demand remained one of the biggest constraints to expanding supply for the local market.

According to the report, domestic gas demand had been undermined by cascading market failures, particularly in the power sector, where payment illiquidity and accumulated debts had made it difficult to establish a sufficiently reliable commercial market for gas producers.

It said these problems had persisted for almost two decades despite successive policy initiatives, including the 2008 Gas Master Plan and the 2017 National Gas Policy.

The report also identified inadequate midstream infrastructure as another major constraint, arguing that insufficient pipeline and processing infrastructure had limited the ability of producers to bring new gas projects on stream and connect supplies to domestic consumers.

Nigeria’s original Decade of Gas plans identified 20 projects or fields that could contribute about 4.6bcf/d within the decade. The initiative also indicated that as much as $22 billion could be required for planned gas pipeline infrastructure by 2030.

But NRGI said the scale of investment required had to be considered against Nigeria’s increasingly difficult financing environment and competition for capital from other sectors. It noted that international oil companies had divested billions of dollars in Nigerian assets in recent years, while investing heavily in competing oil and gas provinces.

Between 2020 and 2025, the report said, six major oil companies invested $47.6 billion in Argentina, Brazil and Guyana, while their investment in the United States reached $137 billion.

By comparison, total oil and gas investment in Nigeria during the period stood at only $9.2 billion, according to the report. NRGI said Nigeria’s difficulty in attracting investment was not limited to the oil and gas industry, noting that foreign direct investment inflows had fallen sharply over the years.

In 2024, the report emphasised that Nigeria attracted $1.1 billion in FDI, representing about 7.1 per cent of total inflows into West Africa, compared with a position in the early 2000s when Nigeria accounted for about 60 to 65 per cent of regional FDI inflows.

The report also highlighted the difficulty Nigerian indigenous companies faced in raising capital to take over assets divested by international oil companies and simultaneously finance new gas developments.

It said high interest rates, short lending tenors and a history of non-performing loans had constrained access to finance, while a significant proportion of domestic bank lending was already concentrated in oil and gas.

“In the upstream sector, capital expenditure of $2.7 billion has already been committed since the start of the initiative, with this number projected to rise to just under $12 billion by 2030, according to data from Rystad Energy. This still falls far short of the government’s $30 billion additional investment target by 2030,” the assessment pointed out.

The report further warned of an underlying tension between Nigeria’s LNG export ambitions and its domestic gas requirements. According to NRGI, producers could earn significantly more by exporting gas than by selling it domestically because domestic prices remained less competitive.

It said the resulting export bias could mean that increased gas production would not necessarily translate into commensurate improvements in domestic energy supply.

Beyond 2030, the assessment projected that Nigeria’s gas production could continue rising into the early part of the next decade, but warned that external demand for Nigerian gas could weaken in the latter half of the 2030s and beyond as major consuming markets increasingly shift away from fossil fuels.

Such a development, it said, could expose Nigeria to billions of dollars in lost annual export revenues and create risks for investments made in large-scale gas infrastructure, warning that Nigeria’s growing dependence on oil and gas revenues presented a macroeconomic risk.

It argued that further concentrating export earnings around hydrocarbons could leave the economy vulnerable to changes in global energy demand and prices.

The institute therefore called for a recalibration of the Decade of Gas rather than a business-as-usual expansion, arguing that Nigeria should pursue a more targeted gas development strategy while simultaneously expanding alternative sources of energy and diversifying the economy.

It said that gas could still play an important role in Nigeria’s development, but warned that the country needed to balance its gas ambitions against changing global energy markets, financing constraints, domestic market weaknesses and the accelerating energy transition.